Treasurer's plan a winner for State of Illinois retirees
THE SAVAGE TRUTH | Merging pension boards would cut costs, aid public oversight
State Treasurer Alexi Giannoulias has proposed a reform to the state-funded pension system that will save more than $80 million a year in fees and costs that come directly out of the pockets of more than a quarter million state employees. The plan is to consolidate the investment management decisions of five large pension funds into one organization, called ILPERS, for Illinois Public Employees Retirement System.
Those who would benefit from this cost-cutting measure include state workers covered by: the Teachers' Retirement System (which covers pension and disability for teachers and administrators in Illinois public schools outside of Chicago); the State University Retirement System (which provides benefits to state university employees); the Judges' Retirement System; the State Employees' Retirement System, and the General Assembly Retirement System.
(AP)
Currently, the pension fund for each of those groups has its own board, investment advisers and decision-making power. Combining them would not only save administrative costs and fees, but the plan would also bring much-needed ethical reform to the management of the nearly $70 billion invested through these funds. Each fund would retain its own benefit administration.
Giannoulias noted that the U.S. attorney's office is working on indictments from the FBI's Operation Board Games investigation. In the trial of Antoin "Tony" Rezko, testimony by Teachers' Retirement System board member Stuart Levine showed that powerful board members worried such a consolidation would limit their influence.
Under the new bill, which is still seeking sponsors, the ILPERS board would be modeled after other state retirement boards, notably CALPERS, which manages California's public pension investments. It would consist of 13 managers, including the chairman of each of those retirement funds. Information about investments would be updated publicly on a monthly basis. Board members would have a required education program. And an ethics component would prohibit finder's fees and other gifts, including political contributions.
ILPERS is an idea whose time is long overdue. Consolidating these powerful and shadowy boards won't guarantee investment profits, but it will save a small fortune annually on costs. Everyone who is covered by one of these employee retirement plans -- all 271,000 of these employees -- should cheer this concept.
And they should send an e-mail to: ilpersnow@treasurer.state.il.us. The treasurer's office will collect the comments and forward them to the state Legislature when the bill is introduced. After all, to coin a phrase: A penny saved is a penny earned!
And that's The Savage Truth!